Are two resources really better than one? Some unexpected results of the availability of substitutes

TL;DR

This paper challenges the assumption that using multiple resources is always beneficial, showing through a system dynamics model and empirical cases that it can lead to worse environmental and economic outcomes.

Contribution

It introduces a system dynamics model analyzing resource switching effects and demonstrates that multiple resources can cause unsustainable growth and worse equilibrium states.

Findings

Exploiting multiple resources can lead to worse outcomes than single-resource use.

Resource switching may cause unsustainable growth and worse equilibria.

Empirical cases include oil drilling and whale hunting showing these effects.

Abstract

The possibility of exploiting multiple resources is usually regarded as positive from both the economic and the environmental point of view. However, resource switching may also lead to unsustainable growth and, ultimately, to an equilibrium condition which is worse than the one that could have been achieved with a single resource. We applied a system dynamics model where users exploit multiple resources and have different levels of preference among them. In this setting, exploiting multiple resources leads to worse outcomes than the single-resource case under a wide range of parameter configurations. Our arguments are illustrated using two empirical situations, namely oil drilling in the North Sea and whale hunting in the Antarctic.